Starbucks’ Italian dream comes true

JAVA JOLT::The Milan store is the US chain’s first foray into the Italian market, charging nearly double the price of an espresso for what it calls a ‘premium experience’

Reuters, MILAN, Italy

Fri, Sep 07, 2018 - Page 10

Starbucks Corp, the world’s biggest coffee chain, is to realize its chairman’s dream today when it opens an upmarket roastery and cafe in Milan, but the test will be to convince coffee-obsessed Italians to pay more for their daily espresso.

The store will be the Seattle-based giant’s first foray into the Italian market, the world’s fourth-largest consumer of coffee, and comes 35 years after chairman emeritus Howard Schultz visited the country and was inspired to set up his own cafe chain.

The venue features a green industrial-scale roaster, marble counters, brass engravings — and a price that could make many Italians reluctant to make it their regular cafe.

At 1.80 euros (US$2.09) for a simple espresso, Starbucks will charge nearly double what Italians pay at their local bars.

“The price reflects the premium experience we will offer customers,” Starbucks global president of retail John Culver said, as he showed media through the store, built inside an elegant, century-old palazzo that the company renovated.

“Once they enter the space our customers will understand exactly what that premium experience is going to be,” he said.

Coffee chains are having to up their game as big money flocks to one of the few fast-growing areas of the drinks market. Coca-Cola Co last week agreed to buy Costa Ltd, the world’s second-biggest coffee chain, while beverage group JAB Holdings Co in May snapped up Britain’s Pret A Manger.

Schultz has said he was inspired to develop Starbucks, which now spans almost 29,000 stores worldwide, during a 1983 visit to Italy, where he was struck by the rapport between baristas and their clients.

As in Seattle and in Shanghai, where the company has opened its two other high-end Starbucks Reserve Roastery, the Milan store is designed as a playground for coffee drinkers, serving it in more than 100 different ways and showcasing the roasting and brewing process.

The 2,300m2 store will also offer cocktails, catering to the Italian evening tradition of aperitivo.

Starbucks said it would start rolling out regular cafes across Italy this year — a move that would bring it into closer competition with Italy’s more than 57,000 cafes.

No other Western country has as many, market research provider Euromonitor International said.

“The Starbucks model and the economic sustainability of their stores are built on a price of its flagship products — cappuccino, espresso, frappuccino — which is very far from the average price in the Italian bars,” said Marco Eccheli, director at consulting firm AlixPartners in Italy.

Starbucks will find it hard to become an everyday choice for Italians, but is likely to attract customers looking for a more complete experience, particularly younger people, he said.

The US group is to open four traditional cafes in Milan with its local partner, Antonio Percassi, by the end of this year.

Federico Castelmare, 55, the barista of one cafe near the new Starbucks cafe, said its higher price would not allow him to charge customers more.

“I expect my clients to be faithful to me, but tourists will surely go to the roastery,” he said.